Abstract
China's overall investment in ASEAN, Western Asia and Central Asia has been relatively large since the "one belt and one way" initiative, while the countries in Central and Eastern Europe and South Asia are less. Geopolitical economic risk is an important factor. In this paper, we use the inventory data of China's direct investment in the "one belt and one road" country for 2005-2013 years, the geopolitical risk index calculated by each sub index score of geopolitical risk released in ICRG, and the data of the system's scoring system of the world bank's development index database issued annually. Component analysis and fixed effect stepwise regression model are used to explore the impact of geopolitical risk on China's OFDI along the "one belt and one road" area. The results show that geopolitical risk has a direct negative effect on outward FDI, that is, China tends to invest in countries (regions) with higher geopolitical risk, which may be caused by foreign policy and resource endowment; further analysis found that factors of exchange rate index, per capita GDP, resource endowment, infrastructure, economic and legal freedom positively promote OFDI, while R&D expenditure has a negative impact on OFDI, which may be due to R&D delay. Therefore, we need to stabilize the political and economic relations among the countries along the belt and road, increase the transparency of investment information of the host country, and strengthen the enterprise's self-awareness.
Highlights
According to the data of China's foreign direct investment statistics bulletin, by the end of 2017, China's foreign direct investment stock had reached 1809.04 billion US dollars, accounting for 5.9% of the global foreign direct investment outflow stock, which was distributed in 189 countries and regions around the world
The stock size increased by 451.65 billion US dollars compared with the end of last year, exceeding the level of foreign investment absorption in the same period, ranking second in the world, and ranking second in the global stock The ranking jumped to the second place, four places higher than the previous year
On the basis of a comprehensive understanding of the connotation of geopolitical risk and previous studies, this paper uses a series of indicators of geopolitical risk published by ICRG to build geopolitical risk index, and constructs geopolitical risk institutional environment index from two aspects, each part of which reflects the different aspects of geopolitical risk related systems
Summary
According to the data of China's foreign direct investment statistics bulletin, by the end of 2017, China's foreign direct investment stock had reached 1809.04 billion US dollars, accounting for 5.9% of the global foreign direct investment outflow stock, which was distributed in 189 countries and regions around the world. The stock size increased by 451.65 billion US dollars compared with the end of last year, exceeding the level of foreign investment absorption in the same period, ranking second in the world, and ranking second in the global stock The ranking jumped to the second place, four places higher than the previous year. In 2017, China's foreign direct investment showed negative growth for the first time, it still ranked the third place in the world with us $158.3 billion, exceeding the level of foreign investment absorption in the same period.
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